Suppose That Jamir and Haidy Are Duopolists in the Music

question 26

Multiple Choice

Suppose that Jamir and Haidy are duopolists in the music industry. In June, they agree to work together as a monopolist, charging the monopoly price for their music and producing the monopoly quantity of songs. By July, each singer is considering breaking the agreement. What would you expect to happen next?

• A)Jamir and Haidy will determine that it is in each singer's self-interest to maintain the agreement.
• B)Jamir and Haidy will each break the agreement.Both singers' profits will decrease.
• C)Jamir and Haidy will each break the agreement.Both singers' profits will increase.
• D)Jamir and Haidy will each break the agreement.The new equilibrium quantity of songs will increase, and the new equilibrium price also will increase.

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